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  • Writer's picturemike

Lobbying During Record Inflation (and a recession?)

Updated: Oct 17, 2022

The election is just a few weeks away, but as soon as November 8th comes and goes then all eyes turn to federal, state and local governments as they tackle record inflation that appears to be around for a while -- along with the growing likelihood of a recession.

Make no mistake, this will dramatically impact state budgets across the country which, in turn, will create a lobbying scrum like we haven't seen a very long time.

Let's start with the fact that inflation is hitting nonprofits hard. According to Givebutter, a popular nonprofit fundraising platform, charities are paying more for materials (think food pantries), there is a greater demand for services, employee turnover is even worse in this sector, there is a shrinking capacity to give, and grants are worth less than they were last year (a $100,000.00 grant in 2021 is worth only about $91,000.00 this year).

As the nonprofit community struggles to meet these new demands you can expect an increased lobbying effort to fill their financial gap with the state's tax dollars.

Add to that the crises in labor, energy and housing - which is beginning to cripple small and large businesses alike - and we are looking at a pending disaster. Not to sound too pessimistic, but a recession after all does cause disastrous effects.

No industry has been hit harder over the last few years than the healthcare industry. The clinical labor shortage (we'll have a piece on the nursing crisis in the near future) is just the tip of the iceberg in healthcare. Hospitals, longterm care and mental health facilities, hospice homes, and even home health care based programs are all facing crises just as we come out of the pandemic. There is no telling the impact a recession will have.

Finally, with New Hampshire heading into their state budget legislative session in 2023, lingering inflation and a potential recession means that state revenues will begin slowing. Thankfully, Governor Sununu and the legislature created an historic budget surplus and rainy day fund, but that could be eaten up quickly during a recession.

This all means one thing when it comes to lobbying. The fight for state dollars will be fierce. You can also expect regulatory legislation to deal with the above mentioned sector crises especially with the recent wallet-crushing hikes in electric rates as we enter the coldest months of the year. I think everyone will be hoping for a warm winter but with cold enough air in the mountains for snow and the ski industry!

If you're a lobbyist, strap on your elbow pads because the scrum will get rough. If you're a legislator, well you'll have more friends than you ever imagined in 2023.

I suppose one silver lining will be that legislative hearing rooms will be so crowded next year that it take as much electricity or fuel to heat the rooms!

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